Congressional Penny-Pinching That Will Hurt US Consumers

ByEsther Peterson and Virginia Knauer. Esther Peterson directed the US Office of Consumer Affairs and its predecessor, the President's Committee on Consumer Interests, under Presidents Kennedy, Johnson, and Carter. Virginia Knauer directed the office under Presidents Nixon, Ford, and Reagan.January 2, 1996

'PENNY wise, pound foolish," perfectly describes the decision by Congress to eliminate the small but productive United States Office of Consumer Affairs (USOCA). Between us, we have served six US presidents in directing this office. We feel obliged to share exactly what will be lost as a result of eliminating it.

In 30 years of existence, USOCA has played a pivotal role in piloting the federal government and the private sector into an era marked by concern for service and responsiveness to consumers. It has focused the nation's attention on such crucial consumer issues as fraud, the erosion of personal privacy, and the particular problems of the frail, the elderly, and the disabled.

Working in conjunction with business and trade associations, community groups, and state and local officials, USOCA has provided essential consumer education to help consumers "buy smart" and protect themselves in the new high-tech marketplace.

President John F. Kennedy established the President's Committee on Consumer Interests in 1962, which led to the formation of the first formal Office of Consumer Affairs under President Lyndon Johnson. Every president since has used the office to further the consumer's interest. USOCA helped President Johnson get the Fair Packaging and Labeling Act passed. President Richard Nixon gave the office its present name and, pointing out that "Consumer protection fosters a marketplace in which our competitive economic system flourishes best," extended USOCA's reach to state and local government and the private sector. He also gave it broad responsibilities in consumer information and education.

Under President Gerald Ford, the office organized a series of White House Conferences on Consumer Representation, which brought his Cabinet into direct discussion with thousands of consumers and consumer advocates. This resulted in a governmentwide commitment to weigh the concerns of consumers before new laws and regulations are adopted.

It was under President Jimmy Carter that the results of a major study led to the so-called "customer service revolution" in the private sector. By executive order, Mr. Carter established a central coordinating committee, the Consumer Affairs Council, to review agency procedures in order to keep the consumer's interests in the forefront of policy deliberations.

Under Presidents Ronald Reagan and George Bush, USOCA initiated consumer information and education enterprises that have become American institutions. The "Consumers Resource Handbook," now in its eighth edition with millions of copies in circulation, has become the nation's indispensable guide to avoiding or resolving consumer problems. National Consumers Week, coordinated by USOCA, involves thousands of consumer organizations, businesses, trade associations, government agencies, educational institutions, religious organizations, and the media in efforts to reach out and inform consumers about their rights and responsibilities. It is estimated that for every dollar USOCA spends in this effort, 18 times that amount is generated in the private sector.

In concert with President Clinton's emphasis on service, USOCA recently instituted the toll-free National Consumers Helpline, to provide a rapid response system for resolving consumer complaints. At the same time, USOCA reviews proposed legislation; develops recommendations for agency action; and organizes forums in which government, consumers, and business can structure cooperative approaches to such emerging issues as telemarketing fraud, privacy, and new technologies.

All this for pennies

And the cost of all this? Less than 3/4 of a penny per year for each of the 260 million consumers in America. Put another way, USOCA costs each of the 97 million US households less than two cents annually.

The justification offered by those in Congress who would eliminate USOCA is the reduction of the Federal deficit. Is that reasoning cost- effective? USOCA's annual budget for 1995 was $1.8 million. If maintained at the 1995 level, the entire outlay for USOCA in 2002 would represent less than four ten-thousandths of one percent of the deficit.

This magnificent savings would occur at a time when state and local consumer agencies are shrinking severely or disappearing entirely, and most federal consumer protection programs are struggling to do more with less.

Americans need to speak out now if we are to avoid losing this important and cost-effective voice for America's consumers. Penny wise and pound foolish indeed.